How will the Furlough Scheme Change in July? Employment
Furlough is a word that we’ve all come to know way more than we would have hoped thanks to the Covid-19 pandemic. However, it can be difficult to keep up with what feels like an ever changing scheme. The Job Retention Scheme has now been extended until the 30th September and we’re often asked what that might mean for employees. In order to explain the changes, we’ve put together the following guide.
What is the Job Retention Scheme?
The Coronavirus Job Retention Scheme has been in place since March 2020 in a variety of different forms. Initially set out to last three months, the scheme has continued to be extended in line with the unexpected severity of the Covid-19 pandemic. Shortly after the lockdown roadmap was announced, the Chancellor of the Exchequer announced that the job retention scheme would be extended in its current form until the 1st July 2021.
Until this date, the government will continue to cover 80% of furloughed employee’s wages, with a cap in place of £2,500 per month. However, this is set to change in the months following.
What will Change From 1st July 2021?
From the 1st July 2021, the Coronavirus Job Retention Scheme will be changing. This is in line with the government expecting more people to return to work should the roadmap out of lockdown be successful. As a result, it will begin to wind down from month to month. With each month that passes, the employers will be expected to contribute more to fund their furloughed employees’ 80% wage up to £2,500.
Below, we’ve included a breakdown of the changes month to month:
- July: 70% government contribution up to £2,187.50
- August: 60% up to £1,875
- September: 60% up to £1,875
It’s important to note that if you are furloughed throughout these months, your National Insurance and pension contributions will still be made.
What Will Change For Me?
If you continue to be furloughed for 100% of the time throughout these three months, you won’t see a change in your pay. There is a chance that with the scheme winding down, you’re asked to return to work. If this is the case, it could happen in one of two ways. You could be asked to return on the basis that you’re ‘flexibly furloughed’ or you could return full-time.
You can find guidance on flexible furlough in our guide to it in the knowledge hub. Essentially, it allows businesses who only currently require their employees part-time to return to work. For the hours that you don’t work, the government will pay you 80% of your salary. However, for those that you’re expected to work, you’ll be paid in full. If you’re asked to return to work full-time, you will be paid in full by your employer.
Get Advice on Furlough with Building Better Opportunities
If you still have any questions regarding how the furlough scheme affects you, please contact us. Here at Building Better Opportunities, we are committed to providing employment support and welfare advice across Stafford and South Staffordshire. Thanks to being a lottery funded organisation, we are able to offer a lot of advice and support, from speaking to our advocates to attending one of our drop in sessions.
We understand how difficult the pandemic has been for people in the area and so we’re keen to help in any way that we can. If you have found yourself falling victim to redundancies or you’re struggling to get back into work, please get in touch.